=====================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE PERIOD ENDED MARCH 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM
TO
-------------------- --------------------
COMMISSION FILE NUMBER 0-11453
AMERICAN PHYSICIANS SERVICE GROUP, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-1458323
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
1301 CAPITAL OF TEXAS HIGHWAY AUSTIN, TEXAS 78746 (Address of
principal executive offices) (Zip Code)
(512) 328-0888
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d ) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
------- -------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
NUMBER OF SHARES
OUTSTANDING AT
TITLE OF EACH CLASS April 30, 1998
-------------------- ----------------
Common Stock, $.10 par value 4,160,693
============================================================================
<PAGE>
PART I
FINANCIAL INFORMATION
-2-
<PAGE>
AMERICAN PHYSICIANS SERVICE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands)
Three Months Ended
March 31,
1998 1997
---------- ----------
REVENUES:
Financial services $3,022 1,946
Real estate 178 182
Investments and other 32 184
---------- ----------
Total revenues 3,232 2,312
EXPENSES:
Financial service expense 2,783 1,751
Real estate 131 129
General and administrative 219 259
Interest 4 3
---------- ----------
Total expenses 3,136 2,141
---------- ----------
Operating income/(loss) 96 171
Equity in earnings/(loss) of
unconsolidated affiliates (Note 3) (297) 462
---------- ----------
Earnings/(loss) from continuing
operations before income taxes
and minority interest (201) 633
Income tax expense/(benefit) (64) 225
Minority interest (1) ---
--------- ---------
Earnings/(loss) from continuing
operations (138) 408
Discontinued operations:
Earnings/(loss) from discontinued operations
net of income tax benefit of $19 and $(21)
in 1998 and 1997, respectively. 36 (42)
---------- ----------
NET EARNINGS/(LOSS) $(102) 366
========== ==========
See accompanying notes to consolidated financial statements
- 3 -
<PAGE>
AMERICAN PHYSICIANS SERVICE GROUP, INC.
CONSOLIDATED STATEMENT OF EARNINGS PER SHARE (UNAUDITED)
EARNINGS PER COMMON SHARE:
March 31,
------------------------
1998 1997
--------- ---------
Basic:
Earnings/(loss) from continuing
operations $(0.03) 0.10
Discontinued operations 0.01 (0.01)
---------- ----------
Net earnings/(loss) $(0.02) 0.09
Diluted:
Earnings/(loss) from continuing
opertions $(0.03) 0.10
Discontinued operations 0.01 (0.01)
---------- ----------
Net earnings/(loss) $(0.02) 0.09
Basic weighted average shares outstanding 4,159 4,032
========== ==========
Diluted weighted average shares outstanding 4,266 4,182
========== ==========
See accompanying notes to consolidated financial statements
- 4 -
<PAGE>
AMERICAN PHYSICIANS SERVICE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)
March 31, December 31,
1998 1997
------------- -------------
ASSETS
Current Assets:
Cash and cash investments $3,354 5,188
Trading account securities 697 449
Notes receivable - current 818 1,157
Management fees and other receivables 750 815
Receivable from clearing broker 0 543
Income taxes receivable 34 0
Prepaid expenses and other 451 508
------------- -------------
Total current assets 6,104 8,660
Notes receivable, less current portion 2,927 2,982
Property and equipment 1,760 1,830
Investment in affiliates 15,309 15,611
Preferred stock investment 2,078 ---
Other assets 305 318
------------- -------------
Total Assets $28,483 29,401
============= =============
See accompanying notes to consolidated financial statements
- 5 -
<PAGE>
AMERICAN PHYSICIANS SERVICE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)
March 31, December 31,
1998 1997
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable - trade $ 332 614
Payable to clearing broker 142 441
Accrued compensation 132 446
Accrued expenses and other
liabilities (Note 4) 4,124 3,573
Income taxes payable 0 226
----------- -----------
Total current liabilities 4,730 5,300
Net deferred income tax liability 740 822
----------- -----------
Total liabilities 5,470 6,122
Minority interest 26 175
Shareholders' Equity:
Preferred stock, $1.00 par value,
1,000,000shares authorized ---- ----
Common stock, $0.10 par value, shares
authorized 20,000,000; issued 4,160,693
at 3/31/98 and 4,160,861 at 12/31/97 416 416
Additional paid-in capital 5,513 5,528
Retained earnings 17,058 17,160
----------- -----------
Total shareholders' equity 22,987 23,104
Total Liabilities and Shareholders' Equity $28,483 29,401
=========== ===========
See accompanying notes to consolidated financial statements
- 6 -
<PAGE>
AMERICAN PHYSICIANS SERVICE GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Three Months Ended
March 31,
1998 1997
----------- -----------
Cash flows from operating activities:
Cash received from customers $3,243 1,930
Cash paid to suppliers and employees (3,229) (2,335)
Change in trading account securities (248) (40)
Change in receivable from clearing broker 244 100
Interest paid (4) (3)
Income taxes paid (286) (7)
Interest, dividends and other investment
proceeds 54 46
----------- -----------
Net cash provided by (used in) operating
activities (226) (309)
Cash flows from investing activities:
Proceeds from sale of property and equipment 2 ---
Payments for purchase property and equipment (26) (56)
Proceeds from equity owners in investment 259 ---
Investment in preferred stock (2,073) ---
Collection of notes receivable 345 9
Other 57 21
----------- -----------
Net cash provided by (used in) investing
activities (1,436) (26)
Cash flows from financing activities:
Repayment of long term obligations --- (542)
Purchase/retire treasury stock (42) (180)
Exercise of stock options 20 ---
Distribution to minority interest (150) ---
----------- -----------
Net cash provided by (used in) financing
activities (172) (722)
----------- -----------
Net change in cash and cash equivalents $(1,834) (1,057)
=========== ===========
Cash and cash equivalents at beginning of period 5,188 5,770
----------- -----------
Cash and cash equivalents at end of period $3,354 4,713
=========== ===========
See accompanying notes to consolidated financial statements
- 7 -
<PAGE>
AMERICAN PHYSICIANS SERVICE GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
(In thousands)
Three Months Ended
March 31,
1998 1997
--------- ---------
Reconciliation of net earnings to net cash from
operating activities:
Net earnings $(102) 366
Adjustments to reconcile net earnings to net cash
from operating activities:
Depreciation and amortization 149 87
Earnings from discontinued operations (55) ---
Other miscellaneous gains --- (133)
Write-off of fixed assets 7 ---
Undistributed (earnings)/loss of affiliate 297 (399)
Change in federal income tax payable (256) 47
Minority interest in consolidated earnings 1 ---
Provision for deferred tax asset (82) 150
Change in trading securities (248) (40)
Change in receivable from clearing broker 244 100
Change in management fees & other receivables 65 (431)
Change in prepaids & other current assets 58 (140)
Change in other assets --- (3)
Change in trade payables (282) (206)
Change in accrued expenses & other liabilities (22) 293
--------- ---------
Net cash from operating activities $(226) (309)
========= =========
Summary of non-cash transactions:
At March 31, 1997, the Company recognized a gain on the discontinuation of a
lawyer's professional liability insurance exchange resulting from the reversal
of accruals for contingencies which are no longer likely. The effect of this
transaction was an increase to revenue and an increase to other assets of
$133,000.
See accompanying notes to consolidated financial statements
- 8 -
<PAGE>
AMERICAN PHYSICIANS SERVICE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998
(Unaudited)
1. GENERAL
The accompanying unaudited consolidated financial statements have been prepared
in conformity with the accounting principles described in the audited financial
statements for the year ended December 31, 1997 and reflect all adjustments
which are, in the opinion of management, necessary for a fair statement of the
financial position as of March 31, 1998 and the results of operations for the
periods presented. These statements have not been audited or reviewed by the
Company's independent certified public accountants. The operating results for
the interim periods are not necessarily indicative of results for the full
fiscal year.
The notes to consolidated financial statements appearing in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997 filed with the
Securities Exchange Commission should be read in conjunction with this Quarterly
Report on Form 10-Q. There have been no significant changes in the information
reported in those notes other than from normal business activities of the
Company.
Certain reclassifications have been made to amounts presented in prior periods
to be consistent with the 1998 presentation.
2. CONTINGENCIES
In conjunction with a settlement agreement, the Company's broker/dealer
subsidiary, APS Financial, has guaranteed the future yield of a customer's
investment portfolio beginning in November 1994 for up to a five and one-half
year period. Management believes that the Company's financial statements
adequately provide for any loss that might occur under this agreement; however,
as defined in AICPA Statement of Position 94-6, it is reasonably possible that
the Company's estimate of loss could change over the remaining term of the
agreement. Management is unable to determine the range of potential adjustment
since it is based on securities markets, which are beyond its ability to
control.
- 9 -
<PAGE>
3. EQUITY IN EARNINGS OF UNCONSOLIDATED AFFILIATE
At March 31, 1998 the Company owned 15.9% (3,064,000 shares) of the outstanding
common stock of Prime Medical Services, Inc. ("Prime"). The Company records its
pro-rata share of Prime's results on the equity basis. Prime is in the business
of providing lithotripsy services. The common stock of Prime is traded in the
over-the-counter market under the symbol "PMSI". Prime is a Delaware corporation
which is required to file annual, quarterly and other reports and documents with
the Securities and Exchange Commission, which reports and documents contain
financial and other information regarding Prime. Such reports and documents may
be examined and copies may be obtained from the offices of the Securities and
Exchange Commission.
At March 31, 1998 the Company owned 74.0% of Syntera HealthCare Corporation
("Syntera"). The Company records its pro-rata share of Syntera's results on the
equity basis. Syntera specializes in the management of OB/GYN and related
medical practices. The Company expects to reduce its ownership to a minority
level as Syntera issues additional shares for future acquisitions. Due to the
short time frame anticipated for this change in ownership to occur, the Company
has accounted for its ownership on the equity basis in the first quarter of
1998.
4. ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued expenses and other liabilities consists of the following:
March 31 December 31
1998 1997
----- -----
Taxes payable-other ...............................$ 226,000 196,000
Commissions payable ............................... 300,000 287,000
Deferred income ................................... 571,000 280,000
Health insurance and other claims payable ......... 18,000 59,000
Contractual/legal claims ........................ 1,508,000 1,461,000
Vacation payable .................................. 98,000 102,000
Funds held for others ............................. 334,000 58,000
Systems disposition costs ........................ 1,132,000 1,138,000
Other ............................................. (63,000) (8,000)
---------- ----------
$4,124,000 3,573,000
========== ==========
- 10 -
<PAGE>
5. Discontinued Operations
The Company, through its wholly owned subsidiary, APS Systems, Inc. ("Systems"),
had previously developed software and marketed it to medical clinics and medical
schools. This business segment became unprofitable and the Company ceased
marketing the software and reduced the scope of Systems' operations to a level
adequate to service existing clients through the terms of their contracts. The
Company has assumed that all clients will have migrated to other software
products by the end of 1999 and has reflected the expected financial impact of
discontinuing this segment on that date in the 1997 financial statements.
Net assets/(liabilities) of the discontinued computer systems and software
segment as of March 31, 1998 consisted of the following:
Cash and cash investments $ 122.0
Trade accounts receivable 191.6
Other receivables 20.9
Prepaid and other current assets 71.0
Fixed assets, net of depreciation 75.6
Intercompany receivables 668.8
Trade accounts payable (4.6)
Accrued expenses (1,166.5)
--------
Net liabilities $ (21.2)
========
6. EARNINGS PER SHARE
Statement of Financial Accounting Standards No. 128, Earnings per Share
("Statement 128") specifies new measurement, presentation and disclosure
requirements for earnings per share and is required to be applied retroactively
upon initial adoption. The Company has adopted Statement 128 effective with the
release of the December 31, 1997 earnings data, and accordingly, has restated
herein all previously reported earnings per share data. Basic earnings per share
is based on the weighted average shares outstanding without any dilutive effects
considered. Diluted earnings per share reflect dilution from all contingently
issuable shares, including options and convertible debt. A reconciliation of
income and average shares outstanding used in the calculation of basic and
diluted earnings per share from continuing operations follows:
- 11 -
<PAGE>
6. EARNINGS PER SHARE, continued
For the Quarter Ended March 31, 1998
------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
Loss from
continuing operations $(102,000)
Basic EPS
Loss available
to common stockholders (102,000) 4,159,000 $(.02)
Effect of Dilutive Securities
Options --- ---
Contingently issuable shares (5,000) 137,000
---------- ----------
Diluted EPS
Loss available to
common stockholders and
assumed conversions $(107,000) 4,266,000 $(.02)
=========== ========= ======
For the Quarter Ended March 31, 1997
-----------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
Earnings from continuing
operations $366,000
Basic EPS
Income available to 366,000 4,032,000 $.09
Common stockholders
Effect of Dilutive Securities
Options --- 150,000
Contingently issuable shares --- ---
--------- ---------
Diluted EPS
Income available to common
stockholders and assumed
conversions $366,000 4,182,000 $.09
======== ========= =====
- 12 -
<PAGE>
6. EARNINGS PER SHARE, continued
Unexercised employee stock options to purchase 366,800 shares of the
Company's common stock as of March 31, 1998 were not included in the
computations of diluted EPS because the effect would be antidilutive.
Unexercised employee stock options to purchase 287,300 shares of the
Company's common stock as of March 31, 1997 were not included in the
computations of diluted EPS because the options' prices were greater than
the average market price of the Company's common stock during the period.
At March 31, 1998 the Company's affiliate, Syntera HealthCare Corp., had
issued 241,000 shares which are convertible into 137,000 of the Company's
common shares in the event that the Syntera shares are not publicly
tradeable by May 1, 1999.
- 13 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
REVENUES
Revenues from operations increased $920,000 (39.8%) for the three-month
period ended March 31, 1998 compared to the same period in 1997. Financial
services revenues increased while real estate and investments and other revenues
decreased compared to the same period in 1997.
Financial services revenues increased $1,076,000 (55.3%) for the
three-month period ended March 31, 1998 compared to the same period in 1997. The
increase in 1998 was due to greater commission income at the Company's
broker/dealer subsidiary, APS Financial Corp. Total revenues at APS Financial
rose $1,176,000 (128.2%). The higher commission income is primarily the result
of a greater number of experienced brokers, most of whom joined the Company
through the opening of a branch office in Houston, Texas on March 1, 1997. The
Houston office currently employs eighteen brokers.
Revenues from premium-based insurance management fees were down
$100,000 (9.8%) for the three month period ended March 31, 1998 compared to the
same period in 1997, due primarily to stiffer competition in the Texas
professional liability insurance market which has resulted in fewer insureds and
lower premium rates.
Real estate revenues decreased $4,000 (2.2%) for the current year
three-month period ended March 31, 1998 compared to the same period in 1997. The
decrease in 1998 reflects greater utilization of the office building by the
Company and affiliates at lower rates than outside tenants. Given the current
economic good health of the Austin real estate market, it is reasonable to
expect rental and occupancy rates to remain favorable throughout 1998.
Investment and other income decreased $152,000 (82.6%) for the
three-month period ended March 31, 1998 compared to the same period in 1997. The
decrease in the current quarter was primarily due to a gain on the dissolution
of an inactive insurance entity in the first quarter of 1997. In addition,
investment and other income declined due to reduced interest income arising from
a lower investable cash balance. Cash and cash investments was lower due to a
$4,387,000 cash investment in the Company's OB/GYN management affiliate, Syntera
HealthCare Corporation, in November 1997 and a March 1998 cash investment of
$1,962,000 in a privately-held developer and operator of dedicated Alzheimer's
care facilities, Uncommon Care, Inc.
EXPENSES
Total operating expenses increased $995,000 (46.5%) for the three-month
period ended March 31, 1998 compared to the same period in 1997. Financial
services and real estate expenses increased while investments and other expenses
decreased compared to the same period in 1997.
- 14 -
<PAGE>
Financial services expense increased $1,032,000 (58.9%) for the
three-month period ended March 31, 1998 compared to the same period in 1997. The
primary reason for the increase is higher commission expense resulting from the
increase in commission revenue at the Company's broker/dealer subsidiary, APS
Financial. In addition, general and administrative costs at APS Financial
increased in the current quarter primarily as a result of opening the Houston
branch office.
Expenses at the insurance management subsidiary increased $36,000
(4.2%) for the three month period ended March 31, 1998 compared to the same
period in 1997 due primarily to higher commissions expense which is the result
of outside agents producing a higher percentage of total premiums. Partially
offsetting this was a decrease in personnel related costs resulting from
a reallocation of some salary expenses from operations to administration.
General and administrative expense decreased $40,000 (15.4%) for the
three-month period ended March 31, 1998 compared to the same period in 1997. The
decrease in the current quarter was due primarily to the reversal of a certain
contingent expense accrual deemed no longer necessary. Partially offsetting this
was an increase in personnel related costs resulting from a reallocation of some
salary expenses from operations to administratiion.
EQUITY IN EARNINGS/(LOSS) OF UNCONSOLIDATED AFFILIATES
The Company's equity in earnings of Prime Medical Services, Inc.
("Prime") decreased $647,000 for the three month period ended March 31, 1998
compared to the same period in 1997. Current year earnings were adversely
affected by a nonrecurring write-off of approximately $5.0 million in fees
incurred in connection with a $100 million senior subordinated debt offering by
Prime, completed in March 1998. In addition, Prime expensed an additional $1.6
million associated with nonrecurring restructuring/development costs. Excluding
these non-recurring write-offs, Prime's net income for the first quarter of 1998
was $3.2 million compared to $3.1 million in the same quarter of 1997. The
Company's percentage ownership of Prime was 15.9% at March 31, 1998.
The Company's equity in the loss of Syntera HealthCare Corporation
totaled $112,000 which represents the Company's 74.0% share of an after-tax loss
at Syntera of $151,000. At March 31, 1998 Syntera had entered into management
contracts with a total of four OB/GYN physicians. Long-term contracts were
entered into with three additional physicians as of April 30, 1998.
MINORITY INTEREST
The Company records twenty percent of the after-tax profit or loss of
Insurance Services as minority interest on the condensed consolidated statement
of operations as well as the condensed consolidated balance sheet. The minority
interest was purchased in June 1997 by Florida Physicians Insurance Company for
$2,000,000.
- 15 -
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Current assets exceeded current liabilities by $1,374,000 and
$3,360,000 at March 31, 1998, and December 31, 1997, respectively. The decrease
was primarily the result of cash invested ($1,962,000) in Uncommon Care, Inc., a
privately-held developer and operator of dedicated Alzheimer's care facilities.
Capital expenditures through the period ended March 31, 1998 were
approximately $26,000. Total capital expenditures are expected to be
approximately $150,000 in 1998.
Historically, the Company has maintained a strong working capital
position and, has been able to satisfy its operational and capital expenditure
requirements with cash generated from its operating and investing activities.
These same sources of funds have also allowed the Company to pursue investment
and expansion opportunities consistent with its growth plans. To further its
ability to meet its liquidity requirements and to accelerate its growth, the
Company has established a $10,000,000 revolving line of credit with NationsBank
of Texas, N.A. The line of credit is for a term of thirty-six months with a
fluctuating interest rate (currently 8.25%) based upon the prime rate. No funds
were advanced under this credit line as of April 30, 1998.
- 16 -
<PAGE>
PART II
OTHER INFORMATION
- 17 -
<PAGE>
Item 1. LEGAL PROCEEDINGS
The Company is involved in various claims and legal actions that have
arisen in the ordinary course of business. The Company believes that the
liability provision in its financial statements is sufficient to cover any
unfavorable outcome related to lawsuits in which it is currently named.
Management believes that liabilities, if any, arising from these actions will
not have a significant adverse effect on the financial condition of the Company.
However, due to the uncertain nature of legal proceedings, the actual outcome of
these lawsuits may differ from the liability provision recorded in the Company's
financial statements.
Item 5. OTHER INFORMATION
On October 31, 1996, the Company invested $3,300,000 in common stock of
Exsorbet Industries, Inc. ("Exsorbet") (NASDAQ:EXSO) with a put option. Exsorbet
is a diversified environmental and technical services company. On November 26,
1996, the Company exercised its put in exchange for a note receivable from
Exsorbet. The note is secured by the shares that were subject to the put plus
all the stock and substantially all of the assets of a wholly owned subsidiary
of Exsorbet.
On November 13, 1997, the Company announced that it has reached an
agreement with Consolidated Eco-Systems, Inc. ("Consolidated ECO", formerly
Exsorbet) to restructure the terms of the $3,300,000 note due October 1, 1997.
In exchange for additional collateral and certain covenants, APS has agreed to
roll all interest due into the note and has extended the terms of the note for
two years. Repayment terms are geared to track Consolidated ECO's improving cash
flow and will include monthly payments of $40,000 from January 1, 1998 through
September 30, 1998, at which time payments become $85,000. The remaining note
balance is due October 1, 1999. No interest has been accrued on this note and,
consequently, there was no income effect from converting the interest to
additional debt.
On March 13, 1998 Consolidated Eco announced that its subsidiary, 7-7
Inc., has been declared in default of a Loan Agreement, Security Agreement, and
Forebearance Agreement by Dollar Bank of Cleveland, Ohio. Dollar Bank has
additionally accelerated all amounts due to it from 7-7, Inc. The amounts total
approximately $850,000. As a result of the actions of Dollar Bank, the business
operations of 7-7, Inc. have effectively been terminated. APS is a second lien
holder of the assets of 7-7, Inc. and does not expect to recoup any funds
realized by the foreclosure and subsequent sale of these assets by Dollar Bank.
However, APS's debt continues to be collateralized by common stock of
Consolidated Eco and one of its subsidiaries, Eco Acquisition, Inc. APS is also
the second lien holder of the assets of another Consolidated Eco subsidiary,
LARCO Environmental Services, Inc.
- 18 -
<PAGE>
On March 20, 1998 the Company purchased non-voting convertible
preferred stock of Uncommon Care, Inc., a developer and operator of dedicated
Alzheimer's care facilities. The shares are convertible into approximately 34%
of Uncommon Care's equity. In addition to the purchase price of approximately
$2.0 million, APS has provided a line of credit to Uncommon Care of $2.4 million
to be used for working capital and interim development financing. As of April
30, 1998 no funds had been advanced. On April 28, 1998 the Company announced
that Uncommon Care was opening its third residential care facility, located in
Austin, and has broken ground on a fourth facility, located in Houston.
On April 23, 1998 the Company's affiliate, APS Practice Management,
announced that it had changed its name to Syntera HealthCare Corporation
("Syntera"). Syntera is a physician practice management company specializing in
OB/GYN practices. The Company is currently a 74% owner of Syntera, a percentage
expected to decline to a minority level as Syntera issues additional shares for
future acquisitions. Syntera also announced that it had signed additional
physician contracts in its Austin, Texas location and had established a San
Antonio presence by entering into contracts with two physicians there.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial data schedule as of March 31, 1998.
(b) Current reports on Form 8-K.
No current reports on Form 8-K were filed during the quarter
ended March 31, 1998.
- 19 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN PHYSICIANS SERVICE GROUP, INC.
Date: May 15, 1998 By: /s/ William H. Hayes
--------------------------------------
William H. Hayes, Vice President
and Chief Financial Officer
- 20 -
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
MARCH 31, 1998 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 3,354
<SECURITIES> 697
<RECEIVABLES> 1,630
<ALLOWANCES> 84
<INVENTORY> 22
<CURRENT-ASSETS> 6,104
<PP&E> 5,611
<DEPRECIATION> 3,851
<TOTAL-ASSETS> 28,483
<CURRENT-LIABILITIES> 4,730
<BONDS> 0
0
0
<COMMON> 416
<OTHER-SE> 22,571
<TOTAL-LIABILITY-AND-EQUITY> 28,483
<SALES> 0
<TOTAL-REVENUES> 3,232
<CGS> 0
<TOTAL-COSTS> 2,997
<OTHER-EXPENSES> 135
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4
<INCOME-PRETAX> (201)
<INCOME-TAX> (64)
<INCOME-CONTINUING> (138)
<DISCONTINUED> 36
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (102)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
